He bought Tesla anyway, which is down 52%. He suffered massive casualties. And there’s a bunch of imploded stocks.
By Wolf Richter for WOLF STREET.
The Swiss National Bank has spent years creating Swiss francs, buying dollars, euros and other currencies with those francs, and then buying assets denominated in those currencies, including a large portfolio of US stocks.
But that concert is over, it seems. Asset prices have fallen sharply and the SNB is unloading. It does not disclose details of its balance sheet, but it must disclose its US stock holdings in quarterly regulatory filings with the SEC, and it has now filed its Form 13F for its third quarter holdings. We’ll come back to that in a moment.
The total “foreign currency investments” on its balance sheet – which includes US stocks and its other currency investments – peaked in February 2022 at 977 billion francs ($1.04 trillion at today’s exchange rate). today). By the end of September 2022, they had plunged by 17%, or 160 billion francs, to 808 billion francs, the lowest since March 2020:
The composition of the CHF 160 billion drop in its holdings is a mixture of market prices, asset sales and the exchange rate of the CHF against the currencies concerned.
The SNB’s US equity holdings.
From the SNB’s Form 13F filings with the SEC, we can see that the SNB not only incurred losses due to lower prices of its US stocks, but also sold most of its largest positions, reducing the number of shares it holds. in Apple, Microsoft, Alphabet, Amazon, Meta, etc.
From June 30 to September 30, the value of US stocks held by the SNB fell by 8.0 billion, or 5.4%.
From March 31 to September 30, which had been the peak in terms of quarterly filings, its holdings of US stocks fell $37.5 billion, or 21.2%.
The value of its U.S. shares had peaked at the end of the first quarter at $177 billion, and by September 30 had fallen to $139.8 billion.
The third quarter covered the powerful rally and crash of the bear market over the summer, with the eventual effect that the S&P 500 fell 5.3% from June 30 to September 30 and the Nasdaq Composite fell 4 .1%.
The SNB is heavily invested in the US stock market. At the end of the third quarter, he owned about 2,770 stocks, including a whole bunch that became penny stocks, and a slew that went public via a merger with a SPAC or via an IPO in the past two years. and who now populates my pantheon of Imploded Actions, like Carvana.
- December 31, 2021: SNB held 289,105 shares, $67.01 million, at $231.79 per share.
- September 30, 2022, down to 213,300 shares, at $4.33 million, at $20.30 per share (-91% per share).
- Today Carvana closed at $11.88 (up 56% in two days, LOL, but down 96% from its peak and down 41% from the SNB reserved price on September 30).
The SNB took on these types of stocks which then imploded. It’s kind of funny that it helped activate the craziest US stock market bubble ever. But now he is trying to unload them.
Top 50 stocks held by value.
The SNB reduced its holdings (reduced the number of stocks) in 42 of the top 50 stocks by value in its portfolio from June 30 to September 30.
The SNB has already started to reduce its holdings in certain stocks in the second quarter, such as Apple, Meta, Alphabet and many others.
But he was continuing to add to his holdings in the second quarter of stocks that he then began to unload in the third quarter, such as Amazon, Chevron, etc.
Even Apple is on the chopping block: the SNB has reduced its holdings since June by 649,000 shares, and since March 31 by 918,000 shares, to 70.14 million shares.
He also has big winners on the list: the oil companies, and he unloads them as well.
It added to its position in the third quarter in just 8 of the top 50 stocks, including Tesla, whose stock is down 52% from its peak. The 8 positions where he increased the number of shares since June 30 are marked in bold.
|Top 50 holdings by value||As of September 30||Change in the number of shares since|
|millions of dollars||# actions||June 30th||March, 31st|
|APPLE INC||9,694||70 142 608||-649,000||-918 100|
|AMAZON COM INC||4,484||39,684,040||-47,400||144,600|
|TESLA INC.||3,037||11,448,877||16,600||357 100|
|JOHNSON & JOHNSON||1,863||11,403,816||-1,600||1,300|
|EXXON MOBIL CORP||1,594||18,256,191||-108,500||-80,600|
|PROCTER AND PLAY||1,313||10,397,973||-200||-83,500|
|HOME DEPOT INC||1,229||4,453,966||-75,800||-68,900|
|CHEVRON CORP NEW||1,162||8,089,332||-358,900||-260,000|
|LILLY ELI & CO||1,132||3,500,048||-11,400||-21,700|
|MERCK & CO INC.||944||10,959,232||-5,700||18,700|
|SCIENTIFIC THERMO FISHER||860||1,696,527||-400||-10,200|
|DISNEY WALT CO||745||7,893,971||-3,700||21,200|
|CISCO SYS INC||718||17,945,820||-74,300||-321,800|
|ACCENTURE PLC IRELAND||706||2,744,938||3,400||9,100|
|VERIZON||691||18 200 201||-9,300||267,900|
|PHILIPP MORRIS||558||6,717,922||-5,000||-25 100|
|UNITED PARCEL SERVICE||514||3,182,818||5,100||24,600|
A note about this racquet.
All of its operations combined generated a massive loss of CHF 142 billion in the first nine months of the year, almost entirely due to these foreign currency investments, which include losses from falling stock and bond prices and CHF 24 billion losses related to exchange rates.
When the SNB printed Swiss francs to buy foreign-currency-denominated assets, it was not actually doing QE in Switzerland; it was more like doing QE in other countries.
The SNB’s purchases of US stocks – with dollars bought with francs it had created out of nowhere – had the same effect as if the Fed had bought US stocks.
So now the process is reversing – a form of QT in other countries as the SNB dumps some of its assets and loses its butt on others.
What the SNB did was one of the most fabulous central bank rackets of all time, fueled by global speculators and investors who kept buying those Swiss francs that the SNB was creating and selling, and their appetite was pushing up the exchange rate of the currency, and the SNB took advantage of this to print more francs, sell more of them for foreign currency – supposedly to drive down the exchange rate of the CHF against the euro, the dollar and other currencies – and buy more stocks and bonds denominated in other currencies.
So now this little country has a $1 trillion portfolio of foreign assets that it bought at virtually zero cost – that is, with money it created at zero cost – and his losses on paper only waste some of the cream of this wonderful racket.
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